Serbia and Croatia tighten labor rules, ending tax breaks and raising penalties for unregistered work

In Serbia, draft amendments to the law on social security contributions and personal income tax propose eliminating the tax incentives that employers have used for hiring people with disabilities and workers on the National Employment Service registry. The measures would phase out the deductions by 2027, potentially making it harder for vulnerable groups to obtain jobs.

In Croatia, the government introduced a new €8,000 fine for employers caught repeatedly employing workers without proper registration. The penalty applies after a third violation within three years and is accompanied by a shortened black‑list period for non‑compliant firms. Additional changes expand electronic work‑time recording to more sectors and require full pension‑insurance registration for part‑time workers.

Both countries are aiming to tighten labor market regulations, though Serbia focuses on removing subsidies for hiring vulnerable groups while Croatia emphasizes stricter enforcement against undeclared work.